"All of us are vulnerable,'' said Schmidt. ``It's a race between a contraction in advertising, which would affect everybody, and a very positive shift from offline to online."

(The current consensus that online advertising spending will just "slow," in our opinion, is a hallucination. We think it will shrink. Equity research firm Collins Stewart says the credit crunch could cost online advertising as much as $6.7 billion in sales before 2010. Search spending will do a lot better than display, but we'd be shocked if the Street didn't have to trim 2009 estimates for Google).

Schmidt told Bloomberg that Google would not cut employee perks. But an unconfirmed tipster with an informant in Google's Taipai office tells us that Google will cut its TGIF gatherings at its international offices, as well as some international travel and offsites (if anyone has this memo, we'd be grateful if you would pass it along: nicholas@alleyinsider.com).

The TGIF affairs were the ones where Schmidt and cofounders Larry Page and Sergey Brin would occaisionally stop by to speak and share cupcakes with the minions. Maybe it's not such a bad idea. Our tipster tells us: "The TGIF meetings resulted in almost no productivity on Fridays and wasted money on entertainment and food."